BRUSSELS, Belgium (AP) 
An alleged worldwide spy network dubbed Echelon and led by the United States does
exist  and European nations should set up an encryption system to guard
against it, the European Parliament said Wednesday. The European Union assembly
voted 367 to 159, with 34 abstentions, to adopt 44 recommendations on how to counter
Echelon.

The parliament, meeting in Strasbourg, France,
also accepted a 140-page report confirming the spy network's existence, despite
official U.S. denials.

"There were those who said we would
not be able to find sound evidence," said Carlos Coelho, chairman of the
investigative committee. "We can say very clearly that Echelon does exist."

The
committee released a report in May after seven months of testimony from communications
and security experts.

EU committee members went to Washington
in May but both the CIA and the National Security Agency, believed responsible
for Echelon, refused to meet with them.

The report said
Echelon was set up at the beginning of the Cold War for intelligence-gathering
and has grown into a network of intercept stations across the globe. Its primary
purpose, the report said, is to intercept private and commercial communications,
not military intelligence.

It said Echelon is run by
the United States in cooperation with Britain, Canada, Australia and New Zealand.

U.S.
officials have refused to acknowledge the existence of such a system, and have
denied that American agencies engage in industrial espionage.

The
report called for closer European cooperation in setting up a joint encryption
and intelligence-gathering system. It called on those sending sensitive information
by e-mail to start encrypting their messages.

European
Union nations should sign a ban on industrial espionage within the 15-nation bloc
and should look more closely at existing national intelligence agencies, the report
said.

It also called on the European Union and Washington
to draw up rules to strengthen international laws on data and privacy protection.

News
reports last year sparked widespread concerns among Europeans that the United
States was using their private communications against them. The report concluded,
however, that "only a very small portion" of global telephone, e-mail and fax
communications were being tapped into, mostly via satellite.

The
parliament's vice president, Gerhard Schmid, said the committee was unable to
gather proof that Americans were passing European trade secrets to U.S. businesses.

"When
we are talking about huge international contracts, we know that the U.S. in fact
listened to business communications in detail," Schmid said, but added that no
businesses affected would come forward with evidence.

Former
CIA director James Woolsey has acknowledged that the United States secretly collects
information on foreign companies, but said it was only done in cases where companies
were suspected of violating sanctions or offering bribes to gain business.

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